During that gap, we weren’t idle…. Like many other real estate innovators, we were repeatedly posting comments on a controversial article in Enterpreneur Magazine entitled: “Who will step up and disrupt the real estate industry”? In the background, we were also quietly organizing an event to introduce innovators to leading real estate consumer advocates. As the image and text above shows, we used the 262 anniversary of the Boston Tea Party to host a conversation about co-creating an open ecosystem in real estate by the year 2020, capable of delivering billions in consumer savings annually. (Hashtag: #RE2020)

As we blogged yesterday, we hope to use a number of upcoming anniversaries to expand that conversation and continue to respond to calls for change coming from inside and outside the real estate industry. Our goal is to encourage innovators, reformers and money-savings real estate business models — not to mention millons of DIY homebuyers and sellers — to think of themselves as a movement and to explore ways to create synergy to expand consumer savings. As an informal group or adhocracy we call RECALL: Real Estate Consumer Alliance, our hope is to deliver $30 billion annually by the year 2020. Want to know where that figure came from — see the use of the phrase “tens of BILLIONS” (emphasis added) in the transcript below:

Saturday July 25 is the 9th anniversary of congressional hearings on anti-competitive business practices in the real estate industry. Industry insiders have been digesting an extensive report by Inman News on the possible impact of the current wave of money-saving real estate start-ups. You can learn more about why survey results should catch the attention of anti-trust regulators again by reading this blog post and scanning the Facebook comment below:

IDEA STARTER: Should we host a virtual conversation to take a look back at the Congressional Hearings on Anti-Competitive Real Estate Practices and a look forward at the impact hybrid real estate models may have on the industry? You can begin engaging that topic on the link below. What other questions should we seed beforehand and who should we invite to participate?

SMART FAILING: Trying to develop a new real estate business model to downsize commissions? Whether you’re trying to reward DIY homebuyers with rebates, or help FSBOs — for sale by owner properties — avoid the real estate industry’s bloated commission structure, what can you learn from the past 20+ years of efforts to disrupt the real estate industry?

Real Estate Cafe is marking it’s 20th anniversary by seeding a conversation about what real estate will look like in the year 2020. Our goal isn’t to dwell in the past, but to help develop an informal coalition dedicated to helping real estate consumers save an estimated $30 billion annually by the year 2020. We call it #RE2020 — and invite you to follow that hashtag on Twitter and other social media.

Why should a new breed of money-saving business models succeed where others have failed? Let’s begin that conversation by taking a look at a couple of items for the RECafe time capsule:

First the photo of what a home page looked like in July 1996 when we hosted a round table at the Real Estate Cafe with Ralph Nader and other leading real estate innovators (more on that later), and

Second what industry pundits were saying at the time about the coming downsizing in real estate.

Here’s one of the relics in the Real Estate Cafe’s time capsule — it is a dead document or does it contain secrets about roads not taken, or opportunities that were ahead of their time? We’ll unfold that theme in coming weeks and months. Join us by following @RealEstateCafe on Twitter.

The Coming Downsizing in Real Estate: The Implications of Technology

The implications for the real estate industry are potentially enormous. In January, 1995 there were approximately 100 real estate Web sites that offered real estate for sale. By year-end, there were over 4000 real estate related Web sites. Exhibit 6 provides a sample selection of 36 randomly chosen Home Pages and a brief overview of their services offered. While some sites are Home Pages of individual properties for sale, others include offerings of over 500,000 listings across the country. Complete marketing and purchasing information is lacking in the majority of the Web sites, but it is looming on the horizon of this new real estate frontier.

Full report: http://www.cob.unt.edu/firel/baen/downsize.htm

CALL TO ACTION:

Want to participate in our SmartFailing adventure or have some fun with futuristic predictions that missed the mark? Here are three things you can do:

Yesterday, Inman News — arguably the leading real estate technology news service — launched an impressive report on a new generation of money-saving, disruptive real estate business models. What they call “hybrid real estate” others, including the former chief economist (shown above) of the National Association of Realtors, have called fee-for-service for two decades. Is it a idea or movement who’s time has come?

Don’t ask Inman Select’s readers, because they’ve have gone silent — at least for day one. That caused us to write this comment on their Facebook group:

Just passed midnight on the East Coast and puzzled as to why 5,336 members of this Inman Coast to Coast group have yet to check LIKE or post a single comment? Stunned into silence by survival questions or embarrassing findings like this? 4 out of 10 respondents said they are generally less inclined to cooperate with a hybrid brokerage than a traditional brokerage, and 56 percent said that many agents discriminate against hybrid brokerages.

It’s been 10 years, time for more DOJ / FTC hearings / trainings on anti-competitive business practices?

What’s a hybrid ? Is there a normal way to do RE business ? What is it ?

Here’s my 10 point response:

Good questions (I can see your legal mind at work).Several thoughts on your question and more:

1.Lumping a variety of alternative business models into the “Hybrid” catch-phrase is a disservice to consumers, both buyers & sellers, who are searching for money-saving options (real estate rebates, flat fees, etc.)

2.If hybrid makes any sense, it’s only from the industry’s perspective.

3.My recollection is that Brad Inman chose the word Hybrid because it wasn’t clear what agency relationship — if any — some of the new business models are offering buyers and sellers using their site. (There’s some irony in that, see #8 below.)

4. Asking if there is a “normal way to do real estate” and who should define it goes to the heart of the anti-competitive practice Inman’s survey has revealed.(Hope someone from DOJ or FTC is reading the report!)

5.The question also exposes some of the issues NOT addressed in the report, like why is the trillion dollar real estate industry still operating on an obsolete-two sided real estate commission that is set by the seller’s agent?

6.If you turn the clock back 10 years, one of the government interventions considered at that time was uncoupling or divorcing real estate commissions, so buyer and sellers can negotiate their own fees.Is it time to revive that conversation or let start-ups like SoloPro.com and veterans (no pun intended, see footnote) of fee-for-service continue to hack away at the dominant model as we have for the past 15 – 20 years?

7. As some hybrid real estate models offer non-agency level services, will that cause an “Agency Revival” led by traditional real estate agents who want to justify their fees? As we blogged before the release of the Inman report, we’d welcome that unintended consequence and use it to expose / repeal Designated Agency in Massachusetts!

8. Ironically, conflicts of interest are already widespread in real estate because of the hypocrisy of Designated Agency. Won’t forming teams — one of the responses recommended by the report to compete more effectively with #HybridRE and the last paragraph of the report — will only cause more conflicts and insider trading?

9. No where in the report is there a hint that rebates offered by the featured companies are trivial by comparison to REAL savings REAL buyer agents can offer buyers. That will become increasingly clear as the housing market changes, and we’ll write more about that on an ongoing basis.

10. If you’re a real estate professional, what’s your take? If you’re a consumer, want us to help you explore money-saving options to meet your needs as a DIY homebuyer or seller?

* FOOTNOTE:SoloPro’s Founder has a formal military background, whereas long-time fee-for-service professionals like the Real Estate Cafe have been using guerrilla tactics on the ground and in cyberspace for decades.

Before the week ends, Inman News will publish their 10,000 word report on the rise and potential impact of new “hybrid real estate” sites on the bloated real estate commission model in the US. From the perspective of a longtime real estate consumer advocate, it’s ironic that the same industry that pushed legislation to abrogate the Common Law of Agency through statehouses from approximately 1993 to 2005 is now using fiduciary services to justify their conflicted but allegedly full-service, full-commission business models.

Meanwhile, there seems to be a growing awareness of the importance of fiduciary duties elsewhere in the economy. This Spring, Consumer Federation of America and a coalition of consumer groups — including AARP’s 40 million member organization — promoted an impressive http://SaveOurRetirement.com campaign. The call for financial advisors to remove conflicts of interest was actively supported by the White House and the charismatic Secretary of Labor, Tom Perez who spoke yesterday at the White House Conference on Aging as did President Obama.

That gave critics of Designated Agency a high profile opportunity to link our campaign against conflicts of interest in real estate to a broader agenda. Anyone who would like to support that call can retweet or share this tiny URL to the President and US Department of Labor:

Finally, it’s outside my expertise but there is also a growing awareness of the impact of investment on the sustainability of the planet. To my surprise and delight, the word “fiduciary” appeared 27 times in this 20 page call for new paradigm called “Sustainable Capitalism.”

Would love to get feedback from agency law experts like attorney / former regulator Maureen Glasheen and CAARE.org founder Doug Miller on both the call to expand the traditional interpretation of agency duties and section on Break of Fiduciary duties included in the report above. Anyone else want to comment or participate in campaign to repeal or neuter Designated Agency laws? July 25, 2015 marks the 9th anniversary of Congress Hearings on anti-competitive business practices in real estate:

That’s 11 days from now… should fellow real estate consumer advocates look at what Inman publishes Thursday and decide how to use that occasion this July and again this Fall — the 10th anniversary of the FTC / DOJ hearings that preceded Congressional hearings?

Homeownership rates are falling in Massachusetts and across the nation, and housing is back in newspaper headlines and nationally syndicated talk shows. Here’s one perspective, that knowingly or unknowingly, points to the Pope’s encyclical on the environment and the prospect of a grassroots movement for housing justice:

Greedy spec builders want the most bang for their buck so the put oversized houses on undersized lots and then cannot sell them. A more modest house would have moved. There are only so many Mr. and Mrs. One Per Cents.

There are only so many 1%’ers if there is no external demand / pressure on local housing markets from global real estate investors. An annual update just released by Harvard’s Joint Center for Housing Studies lists rising home prices as one of the culprits for the homeownership decline, but the words “investor” and “speculators” do not appear in the Boston Globe’s coverage of the document. Contrast that coverage in the New Yorker and inventory snapshots from the former People’s Republic of Cambridge and it’s neighbor, DelusionVille (formerly Somerville):

Cambridge MLS inventory snapshot 6/16/15:
26 listings last year priced $900K+, now 42 or 49% – up from 28% in one year – Unsustainable? #AffordableHousinghttp://bit.ly/CambInv061614vs15

Excerpt from New Yorker article, Real Estate Goes Global:
“The challenge for Vancouver and cities like it is that foreign investment isn’t an unalloyed good. It’s great for existing homeowners, who see the value of their homes rise, and for the city’s tax revenues. But it also makes owning a home IMPOSSIBLE (emphasis added) for much of the city’s population.”

Would be homeowners who have been priced out of the market should pay attention to what’s happening in other cites where ordinary citizens are beginning to push back against real estate speculators: SF, Toronto, and Vancouver are setting the pace, see images from #DontHave1Million campaign:

Writing in Boston, one angry reader blurted out, “Since when is home ownership a right?” His question is a good one, one that has not escaped the Pope’s new encyclical on the environment and the Catholic teaching on the social mortgage, the debt we owe each other as members a just society:

94. The rich and the poor have equal dignity, for “the Lord is the maker of them all” (Prov 22:2). …This has practical consequences, such as those pointed out by the bishops of Paraguay: “Every campesino (definition = peasant farmer) has a natural right to possess a reasonable allotment of land where he can establish his home, work for subsistence of his family and a secure life. This right must be guaranteed so that its exercise is not illusory but real. That means that apart from the ownership of property, rural people must have access to means of technical education, credit, insurance, and markets”.

Contrast that ideal to the reality of what’s happening in housing markets across the country, homeownership is down to the lowest levels in two decades, and “Every Single County in America Is Facing an Affordable Housing Crisis.”

EXCERT: So the question arises, can the housing justice movement that is taking off in Seattle spread across the nation?

My hope is that the Pope’s encyclical will help expedite that movement and lead to a tangible reordering of priorities and policies to address the gross inequities in too many housing markets in the US and around the globe:

93. Whether believers or not, we are agreed today that the earth is essentially a shared inheritance, whose fruits are meant to benefit everyone. …“the Church does indeed defend the legitimate right to private property, but she also teaches no less clearly that there is always a SOCIAL MORTGAGE (emphasis added) on all private property, in order that goods may serve the general purpose that God gave them”. Consequently, he maintained, “it is not in accord with God’s plan that this gift be used in such a way that its benefits favour only a few”.

95. The natural environment is a collective good, the patrimony of all humanity and the responsibility of everyone. If we make something our own, it is only to administer it for the good of all.

Anyone else trying to make sense of the controversy surrounding Upstream, the code name for the mega-Broker Public Portal? Yesterday, Inman News published a guest opinion asking: “Will Upstream be good for everyone?” Not only was this author’s answer NO, but his prediction appeared as the subhead to the story: “This seems like nothing more than another round of NAR vs. the DOJ.” Other Inman readers, including the comment in the image above, added more reasons why.

Surprisingly, the only reference to buyer agent or buyer agency is a disparaging remark in one of the comments. Should that be expected in a controversy about listing data, or does it reflect a blindness to agency duties and the fading role / relevance of buyer agents? Blanket statements like these excerpts used to be fighting words — where’s the outrage?

“Your Listing, Your Lead” should be our mantra

“The broker, and only the broker will be in control of where it’s data goes.”

Maybe it’s premature to expect a comprehensive critique, and consumer advocates and tech innovators will eventually respond to Brad Inman’s assessment:

Finally, after a year of meeting in private, the Upstream founders are out of the closet. Now, their actions and motives can be openly discussed and debated. And knowing what they are up to, pressure can be put on them to do the right thing.

What is the right thing to protect the public interest — particularly in an era of open data where emerging tools allow consumers to control access to their data? Yesterday’s fight was about who controls listing data, but a more important question is on the horizon — who owns and controls the data flowing from billions of sensors as SmartHomes and the Internet of Things become building blocks in a new real estate ecosystem?

Tracking the controversy

What is the best site / social media channel to follow to try to get a better / (and hopefully accurate) understanding of Upstream? Has anyone created an infographic showing what problem / who’s problem Upstream is trying to solve? Finally, what intended or unintended impacts will Upstream have on consumers — particularly homebuyers and the buyer agents they hire to represent them?

Future proofing versus emerging trends

What impact will Upstream have in the short-term, mid and long term, when:

In 2020, the Great Senior Sell-Off will cause a glut of listings and pocket listings and low inventory are replaced by expired / canceled listings and auctions?

Or in 2025, when the trillion sensor economy will have a disruptive impact on multiple industries, including health care and real estate?

If “my listing, my lead” is the mantra, where is the homebuyer’s right to their own advocate in this Realtor family fight? Conversely, where is the homeowners’s right to make an informed decision about how to maximize exposure for their listing? Will games Upstream unintentionally trigger new regulations to protect consumers?

September marks the 10th anniversary of this FTC & DOJ workshop on competition in real estate. Writing then, Blanche Evans of RealtyTimes said the industry was unfairly persecuted because the government agencies and the speakers they selected to testify did not understand “fundamentals of the real estate industry — namely that the broker owns the listing.”

Do the proponents of Upstream and commentators understand or care about agency law?

CALL TO ACTION:

​Unless my browser search is not working properly, NONE of the Inman stories below includes a single reference to buyer agent or buyer agency in the text or comments. Nor does the RISMEDIA story that Upstream defenders reference:

What should RECALL — Real Estate Consumer Alliance — do to address that blind spot? Or am I the one who’s blind, what are fellow real estate consumer advocates and buyer agents already saying?

—–

UPDATE: A comment on another Inman News story published May 16, 2015 made this observation: “MLS is no longer the only market! Listing agents post properties without putting them on the MLS saving their seller the buyer agent commission, or pocketing it themselves.” Here’s a link to story on Upstream funding from NAR & the comment above:

Very pleased that NPR’s nationally syndicated talkshow @OnPointRadio aired a program today about the on-demand economy:

Uber, But For Everything

We look at the “Uber-fication” of the marketplace. On-demand services for almost anything, everything, are catching on. Changing our economy and our lives.

http://bit.ly/OnDemandEcon (share this URL)

One caller pointed to changes in the legal industry, and it will be interesting to see what the new book The Great Disruption (Google Books) says about potential impacts on the residential real estate brokerage industry. Some industry critics and the Realtors’ chief economist predicted made this bold prediction 20 years ago:

“The next major revolution in real estate will be fee-based services replacing the blanket commission pricing that has dominated the industry for so long.”

Why have pioneers like the Real Estate Cafe failed to gain marketshare over the past 20 years? Any new alternative money-saving real estate business models hope to change that? Want to talk about where the industry might be by the year, 2020 (#RE2020)? Let’s start by deconstructing the Realtors new Danger Report:

Apparently, Realtors are taking the on-demand threat more seriously, and as the screenshot above shows they are concerned about the potential Uberization of the industry. Beyond that their DANGER Report, issued three weeks ago at their midyear conference in Washington, DC, identified 50 potential threats to the existing real estate business model. Here are 10 dangers facing real estate agents:

http://dangerreport.com/dangers/agents (share this URL)

Danger or blessing in disguise?

Should real estate professionals and policy makers be concerned about safety net issues? Right now, nearly all real estate agents are commission-based independent contractors who may go months without a paycheck; so unlikely other industries, “The Great Disruption” may offer potential benefits to industry professionals as well as cost savings to real estate consumers.

Want to discuss where the real estate industry will be in the year 2020? Follow, use #RE2020 on Twitter, Facebook, Google+, etc. And let’s compare how this conversation has changed over the past five years:

Will real estate agents become obsolete or morph into fee-for-service real estate consultants?

Commenting on WBUR / OnPointRadio program today onSpinsters: At some point researchers say aging boomers, presumably both sexes, give up on finding a soulmate and look for / co-create a micro-tribe of their own. That may explain why woman are taking the lead rediscovering the joys and health benefits of group living. In fact, the Boston Globe says:

“Already, 4 million 50-plus women live in US households with at least two other women of similar age.”

These are not 60’s style free-love communes in remote places, but sometimes trophy homes in chic neighborhoods in San Francisco or DIY micro-cohousing communities.

So, agree with the caller who said why use such an old fashioned loaded word like “Spinster,” when some of the most active seniors are the ones pioneering new housing types?

Inequality hits home! Let’s use the release of AARP’s Livability Index today and Nobel Prize–winning economist Joseph Stiglitz’s talk tonight in Harvard Square to discuss how America became the most unequal advanced country in the world and what we can do about it.

Let’s use the Livability Indexes for two very different communities Chelsea & Cambridge to talk about what makes a place livable… How would you customize the sliders on AARP’s new site (http://bit.ly/Livability) to find someplace you can afford and like to call home?

As aging baby boomers know, the lyrics are a mix of contradictions – “meet the new boss, same as the old boss.” Is there an unwritten, timeless truth — the more things change, the more they stay the same? Or are we really at an inflection point, where there is new hope for new laws, new consumer-centric “revolutions”?

If you are a Christian or Jewish, this is a week to follow the Who’s instructions: “get on your knees and pray” for deliverance, renewal, and liberation! And as Holy Week unfolds and Passover approaches, the tech calendar in Boston offers a hopeful answer to “Why is this night different from all other nights?”

​Ironically, on April Fool’s Day!​

First, at 4:00pm today, the Institute of Politics at Harvard’s Kennedy School of Government hosts a conversation with the Chief Information Officer of the City of Boston entitled, Citizenville: Government as a Platform.

Then at 5:30pm, Microsoft & the Venture Cafe hosts an interactive conversation on Civic Innovations for Neighborhoods at District Hall:

Beyond that talk, is there hope we may witness another “British Invasion?” Will a new Consumer Rights Act in the UK raise the bar and inspire new consumer protections in the US, specifically a Real Estate Consumer Bill of Digital Rights in the US.

As the Boston Globe writes yet another front page story on BLIND bidding wars, hope the call to reform the real estate industry echoes on both sides of the pond. Please share these links so millions of homebuyers — particularly millennials and seniors — won’t be fooled again! Please share these:

If it’s too late to join either of the events today in Boston, mark April 13th. Author Malcolm Gladwell will be speaking in Cambridge about his book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants. Let’s see what we can learn from that past 22 years, and make another pass at waking the sleeping giant of the consumer movement.

April 2 & 3rd marks the 22nd anniversary of the Consumer Revolution in Real Estate, a two-day event in Boston featuring Ralph Nader, Steve Brobeck of the Consumer Federation of America, and real estate consumer advocates from around the country. Should we cohost an unconference or hackathon with app developers to disrupt real estate / co-create an open ecosystem capable of delivering billions in consumer savings annually?